Data Mining BS/MS Project Clustering for Market Segmentation Presentation by Mike Calder

Clustering Used for market segmentation –Researchers want to find groups that can be targeted with the same marketing strategy Given data of which users click on certain adds, derive discriminative clusters Strategy seen in use for almost 2 decades! 2

Motivation Marketing companies want to produce as few ads as possible while tailoring to the largest possible audiences Search engines already collect enough statistics to make these derivations –No extra methods needed to obtain data 3

Sample Click Data from Yahoo! Represents the volume of advertisement clicks on Yahoo! (different colors indicate categories) 4 Taken from (Haider, 2012)

How Can We Use The Data? Sample Data Attributes –Time advertisement was clicked on –Location of the click on the page –Category the advertisement falls into –Type of marketing strategy used in the ad Must decide on a clustering algorithm and a number of clusters to use 5

Clustering Method Options Algorithms –K-means –Hierarchal –Centroid-based –Distribution-based –Novel combinations of the above Attempting to maximize “log-likelihood”. 6

Sample Algorithm Testing Novel algorithm details are described in Discriminative Clustering for Market Segmentation 7 Taken from (Haider, 2012)

References P. Haider. “Discriminative Clustering for Market Segmentation”. in Proceedings of the 18th ACM SIGKDD International Conference on Knowledge Discovery and Data Mining (KDD ’12). New York, NY, USA: ACM, pp. 417– P. Haider. “Discriminative Clustering for Market Segmentation”. in Proceedings of the 18th ACM SIGKDD International Conference on Knowledge Discovery and Data Mining (KDD ’12). New York, NY, USA: ACM, pp. 417– S. Dolnicar. “Using cluster analysis for market segmentation”. Australian Journal of Market Research, 11(2), S. Dolnicar. “Using cluster analysis for market segmentation”. Australian Journal of Market Research, 11(2), F. Pratter. “Clustering for Market Segmentation”. Abt Associates Inc F. Pratter. “Clustering for Market Segmentation”. Abt Associates Inc